Most businesses are required to carry some form of workers’ compensation. Workers’ compensation coverage is critical to protect your company and your employees if someone is injured on the job. While a lot of companies choose insurance through a third party, it isn’t your only option. Some companies choose self insurance for workers compensation.
Understanding Self-Insured Workers’ Compensation
With self-insurance, you pay the workers’ compensation out of pocket rather than a traditional insurance provider or a state-sponsored provider. If you choose to be self-insured, you can either operate through an individual program or pool your finances with another company to form a group self-insurance program.
Reaping the Benefits of Self-Insured Workers’ Compensation
If you’re like many employers, you probably want to manage your own overhead expenses when it comes to employee benefits. Workers’ compensation is a high expense and there are many complex rules and regulations regarding claims processing. When you’re self-insured, you do not pay high premiums in advance; you have control over your costs and handle all of your claims in-house.
To be self-insured could save your company money. You have more control over the cash flow and how your claims are handled. Rather than working through a third-party insurance company or the government, you have more of a say in how the claims are handled.